International trade is dynamic. Traders will come across different rules, different regulations, and even different trade patterns. Yet despite these challenges, traders still require tailor-made solutions for every business situation, according to Mayowa Egunjobi, Vice President at Deutsche Bank.

Mayowa knows this, thanks to her eclectic background. Her career began after a brief stint with an educational service agency, which brought her to the world of banking. But what started as an opportunity to fill a vacancy at the International Operations department has since evolved into a lifelong passion for global trade—with some important lessons learned along the way.

Today she focuses on advising and engaging with financial institutions within Wes Africa as Vice President, Institutional Cash and Trade Finance at Deutsche Bank based in Nigeria.

“I also support the executive management in coordinating the Nigerian franchise with Deutsche Bank as a group with things like strategic planning and revenue drives for the portfolio that we manage. For my portfolio I’m also responsible for the Know Your Customer (KYC) and Anti-Money Laundering (AML) reviews that need to be done, especially with the peculiar compliance requirements involved with this region. Depending on the risk criteria of that country, clients are classified as such, and this is what determines the frequency of the periodic review to be performed as part of our compliance processes. And I also manage the high level engagements with the financial institution/regulatory body to ensure that compliance,” Mayowa explains.

Overcoming the challenges of global trade

International trade is not always a linear career path.

“International trade is a field that covers very diverse areas,” reflects Mayowa. “Import and export trade operations, investment and international project consultancy, global management strategies, market research…”

The key to overcoming those challenges, according to Mayowa, is building relationships. She regularly engages with a wide array of professionals and enterprises to discuss business opportunities and global trends.

In one case, she even facilitated a complex trade deal across different continents—including a local oil company in Liberia, a U.S. oil franchise, and a small business in Nigeria and manufacturer in China.

Mayowa calls this kind of balance and versatility a delicate operation. Her secret weapon: careful research.

“The IOC was divesting their business from Liberia and some other West African countries and needed to sell off the entities to a competent local oil company,” says Mayowa.

“Another small business was struggling to find a reliable supplier for a unique product they wanted to sell and who would accept trade terms convenient for both parties. Through careful research and negotiations, we were able to facilitate the trade business between a manufacturer in China who produced high-quality goods at a competitive price with the Nigerian small business owner.”

In this case, because the IOC was divesting its operation from Liberia and other West African countries, the deal required two parties—so Mayowa used her attention to detail and expertise on trade instruments to facilitate acceptable contract terms to fit into the buying capacity of the local Liberian company in order to purchase the franchise, while also providing confidence to the seller-IOC that they would receive their funds when due.

Matching the two wasn’t necessarily easy. It required a complicated look at the books, as well as an agreement structure that both the IOC and the local Liberian companies would find favorable.

The solution came by finding the right structure for trade instruments and a long-tenured guarantee between two entities.

“This sale involved payments working with their partner local banks,” notes Mayowa. Without that detail of international trade, the deal may not have come together at all.

It’s also important to understand how these complex trade agreements can affect companies and individuals across the globe. Mayowa notes that negotiating and finalizing these high-value trade deals has not only brought significant revenue to her company, but helped optimize supply chains and reduce costs for different companies affected by the trade deal. The result is a contribution to the global economy that’s difficult to put in dollar terms.

The power of relationships in international trade

For Mayowa, putting together the right details like that depends on building relationships to support her career in international trade. Given how dynamic international trade can be—with international rules and regulations constantly changing—these relationships help keep her in the loop and address complex issues by cutting to the heart of negotiations.

Negotiations like these also highlight Mayowa’s love for finding small business solutions for what are sometimes international trade concerns. She believes small businesses—like the local banks in her negotiation between U.S., China, Nigerian and Liberian trade partners—can “thrive and grow by tapping into global markets.”

After all, the significance of the Liberia-U.S.- a deal in question can be seen as a bridge-building endeavor. It brought together the continents with different economic priorities and sets of economic rules. Even so, finding the right instruments and identifying the key local business partners was essential to executing the trade the right way.

That’s where relationships enter the picture.

Whenever mentoring young professionals in international trade, Mayowa recommends relationship-building from the very beginning. Since every trade pattern has its own sets of rules and local needs, building those relationships helps trade experts quickly decipher the problems that may be getting in the way of negotiations.

She says that the power to adapt and provide the best value for clients often depends on the strength of one’s personal connections. And pursuing connections like that can be a career-long endeavor.

Want to learn more about the Certified International Trade Professional (CITP®|FIBP®) designation? See why it’s the world’s most recognized designation for competency and credibility in global business.

Becoming a Certified International Trade Professional (CITP)

“I found out about the CITP four years ago. And at that point in my career, I had already transitioned into the international banking space, and I wanted to do something more. After earning my Certified Trade Finance Professional (CTFP) in 2020, I wanted to take on additional challenges and continue to move up the ladder within the international banking space.

“One of my colleagues mentioned the CITP to me as the highest form of certification for international trade professionals recognized in the Americas.”

“And I said ok, let me give it a try and started reading up on the CITP designation. The more I learned about it the more fascinated I got and decided to go for it.”

One of the biggest milestones in Mayowa’s career was applying to earn her status as a CITP.

“Having the CITP designation demonstrates your expertise and professionalism in the field of international trade,” notes Mayowa.

It not only enhances one’s credibility with peers but boosts reputations among clients and employers as well.

It also demonstrates a commitment to the kinds of skills that have helped her develop her career in international trade.

Looking to the future: What’s next for Mayowa Egunjobi

Mayowa is confident that her CITP designation will have a major, critical role in her career progression. Since relationship-building is the name of the game, having this certification helps establish credibility within new relationships, which can help move the wheels that turn global trade.

She also sees that the international trade market is nothing if not unpredictable. “Dynamic” is an understatement to Mayowa. And because international trade is always fluid, it takes someone with both passion for learning and a willingness to adapt—traits that attracted her to international trade.

In fact, she identified being part of a professional community like this as a great way to help her stay ahead of emerging trends. New trade regulations and innovative market technologies will always be on the move. But Mayowa believes that a steady approach to building the right relationships—and finding the right details in trade negotiations—will always win the day.

For professionals like Mayowa, building a strong network of relationships while staying open to the changing winds of trade dynamics always creates opportunities to build bridges where there were none before.

The post CITP Spotlight: Mayowa Egunjobi – Vice President, Institutional Cash/Trade Finance FI, Deutsche Bank appeared first on Trade Ready.

COVID-19 is continuing to influence international trade. The supply chains of small and medium-sized enterprises (SMEs) are facing all kinds of disruption due to the current fast-moving and ever-changing situation. The reality is that many SMEs are struggling to continue their businesses, an element of which has been conflicts or disputes with their suppliers.

The Incoterms® rules are an internationally recognized standard and are used worldwide in international and domestic contracts for the sale of goods. Incoterms® help businesses operating internationally avoid costly misunderstandings by defining the costs, risk and obligations in each international trade transaction, protecting both parties.

Incoterms are one element of many in building strong, clear contracts that can protect both SMEs and their vendors, ensuring proper communication, expectations, and clear procedures in the case of disruptions. For SMEs especially, this is critical to their success, and even survival in challenging times.

To help get some answers on how SMEs can protect their supply chains and their businesses during this time of disruption we brought together experts in supply chain management, contracts, customs and the Incoterms® 2020 rules to answer key questions on how SMEs can protect themselves and have confidence in their international transactions.

The conversation was led by moderator Emiliano Introcaso, CITP – Export Advisor, Export Development Canada, EDC

Emiliano has close to two decades of experience working with manufacturers and exporters looking to increase their global growth by providing them with support and guidance in all things export.

His work focuses on navigating companies through the complexities of global supply chains, but also in the small details that can make or break an international trade transaction. Emiliano is an Export Advisor at Export Development Canada (EDC), a Certified International Trade Professional (CITP) with the Forum For International Trade Training (FITT) and an International Chamber of Commerce (ICC) Registered Trainer on Incoterms® 2020.

Incoterms rules are key to mitigating risk with your suppliers

Floyd Simpkins, CITP – Founder Simcor Solutions Inc., Incoterms^® 2020 Trainer

Floyd Simpkins has over 35 years of international business experience in both the private and public sectors. He’s worked as a senior trade consultant with the government of Ontario, led multiple private sector companies to success in their international ventures as Founder of Simcor Solutions and is a certified Incoterms^® 2020 trainer.

Emiliano: How can Incoterms rules be used to ensure contracts have covered all the different key areas of risk and provided proper instruction for any disruptive scenario of the deliveries?

It’s a very important question in today’s environment, and what it comes down to depends on the risk tolerance of both parties. How much risk is a seller willing to take given its size and capabilities, and correspondingly, how much risk is the buyer willing to assume, and how will this affect the prospective sale?

Using Incoterms in a COVID environment requires first and foremost, a whole lot of upfront discussion between sellers and buyers about that risk tolerance before the contract is established, and then the acceptable Incoterm can be applied to the shipment, because if we don’t have that, we’re not going to have any agreement on the contract.

Deciding which Incoterm to use is also more important now for sellers and buyers to access certain practical capabilities of their carriage partners, because we’re moving goods from seller to buyer.

For example: protocols that our providers have in place to manage COVID risk on delivery. Does a carrier now use some form of digital confirmation that delivery has taken place like a “no-touch” solution? An example of a possible solution to this matter is  what Conestoga College is doing – they are building a mobile software application that will help supply chain workers maintain physical distancing, and still obtain the necessary signatures to complete their delivery documentation.

For delivery drivers, typically when they arrive, they have to go into a building and get a physical signature, but this application will use geo-fencing to get a reading on where the trucks are, how they can be monitored to travel within that range to their destination, and then be routed to the correct door to deliver, and then stay in their truck and complete their documentation digitally. Those kinds of innovations might help us with a critical element, which is ensuring delivery has taken place.

Emiliano: What are some of the specific Incoterms that are particularly important for contracts in this type of environment?

If we look at it from the seller’s perspective, any term where the seller takes more responsibility for getting the shipment closer to the customer before officially transferring risks is particularly important. We can also think of Incoterms as a marketing and sales tool to keep our customers satisfied that delivery is going to be in their hands where, and when they want them. Using Incoterms to clarify risk where risk actually transfers in the contracts of carriage is the most critical at this time, especially where many different carriers are being used to deliver contracted product to buyers.

So we want to use the terms that get the product closer to the customer:

• CPT “Carried To Pay”
• CIP “Carriage and Insurance Paid”
• DAP “Delivery At Place”
• DPU “Delivered At Place Unloaded”
• DDP “Delivery Paid”

Those are terms that are particularly important in this environment to make sure that, above all, we’ve got the delivery point clearly identified because we’re trying to get it in the buyer’s hand safely and securely, and ensure that delivery is in the right place at the right time.

Learn more about the latest edition of Incoterms® and learn how to properly incorporate them into sales contracts and invoices

Emiliano: Since Incoterms® 2020 was just updated in January, what are some of the changes that importers and exporters should know about? Are there any specific resources that you would recommend?

There are a few technical terms that have changed. And one of the big ones was FCA where the buyer selects the means of transport. This is one to look at because FCA was clarified to make it very clear that when the goods are handed over to the buyer’s means of transport, that’s when delivery takes place. There are a lot of resources out there, both public and private.

I would suggest that FITT’s Incoterms training, now delivered online, is as good as any resource out there because it’s based directly on the partnership that they have with the International Chamber of Commerce – ICC, who defines the Incoterms in trading guides and materials.

Customs issues can quickly eat up profits and damage your reputation with customers. Avoid them by doing due diligence and working with experts.

Audrey Ross, CITP – Logistics & Customs Specialist, Orchard Custom Beauty

Audrey is the in-house expert on global shipping, supply chain operations, customs and international tax for Orchard Custom Beauty, a cosmetics and private labeling global project management specialist where she also manages the logistics coordinator position.

Emiliano: What are some of the problems that people are dealing with at the border with international shipments right now? And what are some of the tips you could provide to businesses on how to prevent those common issues?

The current situation specifically around COVID is just an increased scrutiny, which a lot of businesses weren’t prepared for. Depending on your product line, if your business had made pivots into making hand sanitizer or making fabric face masks, for example, there will be increased scrutiny because these are highly regulated health and safety products.

For most businesses it was a great idea to pivot, but at the same time when there were some regulatory concerns that they may not have been aware of.

So for those kind of the hot items, anything around PPE fabric, face masks, even hand sanitizer pivots in general, the most common custom problems are around HS codes.

Make sure that your businesses is using the tariff tools, there’s a number of resources on TariffFinder.ca. The World Customs Organization can also help you out there. If you’re going into different countries, the World Trade Organization has lists as well. In terms of customs, HS codes are really the most important kind of descriptor. The next problem you might encounter is that your descriptions are too vague. Along with your HS code, customs authorities have to see what the description of your product is because they want to ensure that matches. So if you say that it’s say a bag, you need to specify what kind of bag, because as it turns out in chapter 42, there’s something like 50 different types of bags. Is it made of leather? Is it made a PVC? Is it a handbag? Those kinds of key descriptor words on your commercial invoice and even on your bill of lading are very important to helping match that HS code.

When you’re dealing with free trade agreements and cross border trade, there’s country of origin versus country of transit. I know here in house there can be some confusion from my teammates around this. If you see that a product or component is coming from this country and it’s going to the U.S., where was it made? Was it actually made in Canada? Was it made somewhere else? Because that’s going to have a big impact on the usability of those free trade agreements.

Another thing I’ve noticed is that the parties who were involved in the transaction are unclear. Now your business might be a bit more straight forward and you are a seller and you have a buyer. But for some of us, it’s much more complicated and we have a manufacturing partner. You might have an agent involved and you yourself are the overseeing party, which is sort of what Orchard does. We call these contracts triangulation. And then we have a buyer and we also have the party we are delivering to, and that might be five different addresses. How do you fill out that paperwork?

It’s important to be really clear on who’s doing what and show in your Incoterms who’s responsible at each point.

If you are doing importing, depending on what your Incoterm is and what you’ve set up, if you are the importer of record, you should be aware that in some countries you can’t have a foreign importer. For example if you’re making Canadian exports and you’re shipping down to Mexico, Mexico, doesn’t have a non-resident importer program. You need to rely on the person who’s buying the goods or another party to be able to import on your behalf because they have to be Mexican resident. And if you are the importer of record, the key from a customs department’s perspective is who’s making the payment of these duties and taxes? CBSA here in Canada wants to know who they’re getting the money from and that they’re going to get it.

Supply chain management has never been more complicated for SMEs. In today’s environment, it’s all about risk management.

Bruno Morin, CITP – Global Market Manager, Axens

Bruno has been working in international trade for 25 years. During that tenure he has been to more than 60 countries negotiating contracts. He has experience and expertise in all aspects of international trade, including shipping, customs, and finance. He also served on the FITT Board of Directors.

Emiliano: What are some of the main issues that suppliers and shippers are facing in terms of delivering the products and how can the SMEs work with their vendors to prevent them?

As an SME or a buyer, it’s perfectly normal to be nervous these days. So many things can go wrong.

And it’s not always the fault of the buyer or the supplier. We saw the strike at the Montreal port earlier this year, and all the COVID related problems and shut downs around the world at the ports. A common problem historically, is when a container gets damaged at the transshipment port, while in transit. That wouldn’t be the fault of the supplier or the buyer. It just happens.

So for me, it’s really important as a buyer, and as an SME, that you make sure your supplier has a good insurance policy, and that when you make a list of the required shipping documents, that the insurance certificate is included in that list. This you know your supplier is serious, and that if there’s a problem you have an insurance company that’s going to help both the supplier and buyer to resolve the problem, because the problem in international trade is the costs go up.

If you have a problem in transshipment or at arrival at the seaport, and you don’t have your documents done properly, your goods will get stuck at customs. The fees you have to pay will be on a per day basis. And if you are small, it won’t be long before the buyer is going to abandon this cargo because the fees are more than the value of the goods. So as a supplier, you’re stuck. Right now, again, it’s perfectly normal to be nervous, to ask for extra time. As an SME you probably can’t afford to go for just in time delivery. In my opinion, you need to plan for extra time for delays from A to Z. Your trucking company might not have a driver, because there was an explosion of COVID cases in that specific city. It’s better to receive the goods a little bit earlier than to wait until the last minute and risk having problems.

Emiliano: So what happens in the inverse situation where the buyer is dealing with a supplier delinquency? How would you address that?

The main point is as a buyer, you need to document each step. Before you signed the contract, you should have made sure the supplier had a good insurance contract. So with that assumption as a buyer, you need to document everything you did. As soon as you have a problem with the supplier, you need to file an “intent to claim” letter and send it to the freight forwarder and the buyer. Then, six months down the road after you went back and forth with the supplier and the insurance company, it’s documented that your intention was to get your money’s back either from the supplier or the insurance company.

Emiliano: Where should you position your suppliers and manufacturers to prevent disruptions and/or build in redundancy in case of emergency? Should you go closer to your customer base?

This is the whole other aspect of risk management.

In general, it’s recommended to have more than one supplier, because particularly these days with COVID, it’s quite risky to put all your eggs in one supplier.

For example, you might have a local supplier that has higher costs and the product that they sell is not perfect. But as a backup plan, it’s really important that you keep a good relationship with that local supplier, because your international supplier, that may have a better product at a lower price is physically very far away and therefore riskier in times of disruption.

Negotiating and signing a contract that clearly defines risk and responsibility is key to protecting your business, and even more important during times of disruption.

Clarecia Christie, CITP – Founder, Global Compass Consulting

With over a decade of experience, Clarecia’s professional focus is the intersection of international market access and women’s economic empowerment. She has managed projects commissioned by regional and international development agencies such as Global Affairs Canada, in various sectors in the Caribbean region, Central and South America.

Emiliano: Before the contract is written, what should SMEs be asking for from their suppliers/manufacturers to ensure that they cover their bases? As a buyer, what can you expect the suppliers to ask for during negotiations?

From an SME perspective, it’s always good to have an understanding of your supply chain from end to end.

And you need to know the rules of the game – the trade rules. If you’re going to be supplying to a country where you have a trade agreement, understand what you can capitalize on within that trade agreement and what you’d have to do to that product to make sure that it can enter that country. 

Capitalize on different trade rules or different provisions that are in a trade agreement that you can utilize. You may have to modify your product to adhere to the rules of that trade agreement which will have associated costs, so it’s extremely important to be aware of these considerations. Another thing that you’d have to look at is your suppliers to produce the goods, or if you’re manufacturing the goods offsite from out of your country, will they be able to deliver and what are their costs? Do you expect any change in the cost to produce that modified product? When you’re doing the costing of your product, you’re going to have to include that in it, to come to your final price.

So the questions you’re going to be asking that supplier include the cost to deliver time, and the capacity to deliver. You should also know before going into negotiations, are you going into a country where the culture is different from yours? Do you have to look at language changes? These are some of the many aspects that you have to take into consideration before the contract is written. And even before going to negotiate, you have to pull your costs together. Then, think about how you’re going to get the goods from one place to the next. Are there any problems or anticipated risks along the way? These are some of the things that an SME will be asking their suppliers and manufacturers, to ensure that they can actually deliver on the promise that they’ve made to their potential buyer.

Emiliano: What are some red flags that may come up during contract negotiations?

There are many red flags that can come up during a contract negotiation. Let’s take a look at something that’s a creative product. During your negotiations the other party may ask for transfer of your IP. You have to be diligent to understand why they would want that. Will that restrict you, your IP, or your product from selling to another company? So that is a red flag to look for. Another thing that we could look at is non-competition. Why would you ask for a non-competition clause for a product? Maybe you have plans to go into that field. And eventually the person who is your first supplier will be pushed out. Look out for payment. If someone is asking for payment upfront, from a buyer perspective that’s a red flag.

If you have a lead, you have to do your due diligence to learn more about who your buyer is and what their performance has been with other suppliers.

Emiliano: What are the most common contract errors SMEs make and how can they fix them/ prevent them? And when should an SME engage lawyers, or contract experts to help?

A common error I see is that a business gets an order and they’re really excited about it. It’s just a verbal agreement, and because the seller may be inexperienced and excited to fulfill this opportunity, they go ahead and start making preparations without due diligence. They haven’t thought about risk. Who’s going to take on the risk at what point of the logistics chain? A verbal contract is not a sound contract.

Another common error is also is flip-flopping on price.

You have to do your costing analysis and pricing analysis so that you know that the price that your contract is proposing is the price that will give you your profit will cover your costs and cover your risk.

I have seen instances where a price was quoted and the seller was very happy about that price, but inflation, foreign exchange, fluctuation rates have eaten away that profit. You don’t want to come back to a buyer who you have signed a contract with to say, I can’t supply these goods at that price.

Another thing that you have to be clear about is in which jurisdiction will any sort of dispute settlement occur and which method of dispute settlement. Make sure you have all your I’s dotted and your T’s crossed before going into a contract negotiation. It’s always good to pull together a team so that you have the expertise to cover all your bases. You’re covering most favored nation. You’re covering certificate of origin. Making sure you have the right HS code because you don’t want to be a burden on the buyer, but you also don’t want to be losing anything on your end.

And yes, you have to have legal counsel, whether you’re a seasoned exporter or a new exporter, because laws change. Even if you have a revolving contract, there are instances when laws change and whether you have a revolving contract or not, you’re going to have to make amendments to those contracts to go with the law of the land, especially if you’re using a third party jurisdiction for dispute settlement.

Watch the full webinar including a live Q&A with the panel!

The post Incoterms 2020 & COVID-19 – Protecting your business and supply chain through diligent contracts appeared first on Trade Ready.

Being good at working closely with others as part of a team, travelling all over the world, and dealing with challenging, often unexpected problems are all characteristics of international trade professionals.

They’re also important qualities for those in the military, where Nord Mensah first began his career in international trade. Nord pursued his passions, enlisting in the Royal Canadian Navy a year after completing his degree at the University of Alberta, and eventually found a perfect fit in logistics.

“I began my career in international trade in December 2000, when I became a Logistics Officer in the Royal Canadian Navy (RCN). At the time I was not aware of where my professional career might take me. However, I was very interested in business, international relations, and international trade. My career as an officer in the RCN allowed me to travel all over the world while negotiating contracts for goods and services to support both my ship and Canadian military operations overseas.

Perfecting the art of negotiations and closing deals at sea

The immense scale and complexity of the Canadian military’s logistical strategies provided a number of challenges Nord encountered that he never could have imagined before working there. Many of those came in the Middle East, where he spent a significant amount of time over the years.

“Having sailed in many of the world’s oceans, I fondly remember reconciling multiple invoices from foreign ports while transiting towards the Arabian Sea. The invoices were particularly challenging because I had to manage a total of three foreign languages before finally being able to verify all contracted work had been completed.”

As part of his responsibility to negotiate contracts, Nord took meetings with businesspeople all over the world. Over the years, he says one of the most important lessons he had to learn was to adjust his expectations regarding time management to fit with local norms.

“People around the world appreciate time differently, and all good negotiations begin with a clear understanding of how each party understands and employs time.”

In some cultures a five minute meeting is truly five minutes and may start two minutes early, while in another culture a five minute meeting is two hours, starts 45 minutes late, and involves dinner.

During Nord’s years of service, the Canadian mission in Afghanistan represented a major commitment of personnel and resources. This required vast numbers of logistical contracts and agreements to manage the needs of those stationed there.

Canada’s eventual military withdrawal from Afghanistan also presented a massive logistical undertaking, in which Nord played an important role. This work remains one of his proudest accomplishments to date.

“I was awarded a commendation by the Chief of the Defence Staff for my work and leadership in managing and eventually closing Canada’s military contracts in Afghanistan at the end of Canada’s combat mission in the country. The task entailed reconciling and terminating thousands of agreements over a period of six months.”

How the student became the teacher

Over the course of his naval career, Nord pursued several opportunities to further his education to meet his career goals. First, he earned his MBA in 2007 after two years of hard work and studying. The next year, he began his Ph.D in business administration, with a focus on management and operations.

In 2014, he not only completed his doctorate to earn his Ph.D, but also his Master’s of Defence Studies through RMC.

By 2016, with over 15 years of experience in logistics and four degrees to his name, he had built an exceptional career and accumulated a wealth of knowledge he could pass onto others.

With that in mind, he decided to take on a new opportunity as a full-time professor at Fanshawe College, one of FITT’s educational partners. He became heavily involved in the school’s international business management program, teaching courses on business administration, supply chain, logistics, finance, management, leadership and organizational design, as well as taking on design and supervising responsibilities for other courses.

In May 2017, he became the new coordinator for the program and continues his teaching responsibilities while ensuring all courses run smoothly. Shortly after, he applied for and earned his CITP®|FIBP® designation and is confident it will be highly beneficial to his work moving forward.

“I chose to apply for the CITP®|FIBP® designation because I wanted the formal recognition of my professional experience and education that is associated with the CITP®|FIBP® designation. Now as a post-secondary professor I can share the value of this credential, based on my experience, with my students and fellow faculty. I can now give them greater perspective and insight into international trade activities and opportunities.”

On a personal note, I am extremely proud of my CITP®|FIBP® designation. It is one of the most significant culminating accolades in my professional career.

As he continues to run the program there, we know he’ll do an exemplary job for students and faculty alike, fostering the next generation of trade professionals and guiding them towards a path for success.

The post Nord Mensah, CITP|FIBP – Professor and Program Coordinator appeared first on Trade Ready.

All business is local. However, all markets are global. Global trade and technology has created opportunities for business to serve an existing market segment over a wider geographical area. …

– page 67, Sustaining High Growth for Long Term Success

The rapidly growing global middle class are experiencing a convergence of lifestyles. This has created a huge demand for similar consumer goods around the world. The implication is that the niche markets that many businesses serve in established locations now also exist in other parts of the world, and present exciting opportunities for companies willing to enter those markets.

The Asian block, consisting of West Asia, Central Asia, South Asia, Southeast Asia (ASEAN) and East Asia, contributes the largest share of the global GDP. Following is the GDP share of the three largest blocks:

Global GDP

1. The Asian Bloc – 33.84% of global GDP
2. The North American Block – 27.95% of global GDP
3. The European Bloc – 21.37% of global GDP

Combined, these 3 blocs generate 83.16% of global GDP.

Asian countries have diverse political and economic systems with varied business cultures, and a “one size fits all” approach to marketing and negotiating business partnerships may not be the best approach when we plan to export from North America to Asia. With that in mind, what steps should you take to negotiate effective partnerships and expand your presence in Asian markets?

Never be afraid to keep your options open in negotiations

The following case illustrates the different factors a North American cereal company identified when negotiating with two Asian businesses in two different countries.

A prospective supermarket chain was willing to purchase cereal products from the cereal company at the agreed price. An issue arose, however, when the supermarket chain asked for credit terms of payment in 90 days instead of 60 days as stated in the cereal company’s “Standard Terms of Contract”.

The supermarket chain had a reputation of making prompt payment on terms it agrees to. Furthermore, they had the ability to purchase an estimated 65% of the cereal company’s production capacity for the Asian market, so they felt their position gave them the necessary leverage to make this request.

The cereal company then had to weigh its negotiating options. Even though the supermarket chain insisted on a 90 day credit period, the local political, economic and social conditions would enable the supermarket chain to get a bank guarantee for payments.

An option for the cereal company was to sell at a higher price to accommodate for the expected delay in payment or to bare the loss from delay in payment as a result of agreeing to extend the payment period to 90 days.

Their alternative was to sell to a distributor in a neighbouring country that agreed to the price and 60 days payment term. However, there were greater political, economic and social uncertainties in this neighbouring country, which resulted in market and currency fluctuations.

Additionally, the distributor was not able to provide a bank guarantee for payments, but the owner of the distributor had a reputation with other North American companies of being true to his word with payments made as agreed.

By simultaneously negotiating with the supermarket chain and the distributor, the cereal company was able to assess the walk-away position with both parties. Having an alternative enabled the negotiator to achieve the best terms possible in negotiations with both parties.

What factors were most important to weigh in getting the best possible agreement?

To get the best agreement possible in Asia, the cereal company’s negotiator evaluated the two alternative businesses (the supermarket chain and the distributor) as well as the countries within which they did business.

As part of that evaluation, the negotiator went through the following steps:

1. Analyze the desired agreement objectively
2. Understand the people in the prospect business
3. Identify the other parties’ true interests in the agreement
4. Explore best alternatives and options before making a decision

To achieve a meeting of minds and agreement, it’s crucial to understand the thinking and values of the owners and operators of the business involved in the negotiations. This includes understanding them in both a social and business environment. Cultural understanding plays a significant part in assessing the prospect of a productive long-term relationship being established.

To decide which of the two alternatives would be best for their needs, the cereal company had to address the questions:

1. How should they value qualitative versus quantitative factors?
2. What if the supermarket chain delayed payment beyond the 90 days payment period?
3. What if the alternative deal with the distributor is then no longer available?

A PEST analysis is your key to understanding important market factors

Additionally, the cereal company had to do a PEST Analysis to assess the political, economic, social and technological factors that would impact its business in the respective countries. This required an assessment of the supermarket chain and the distributor, as well as their competitors within the local business environment in relation to the following factors:

Political analysis: This includes environmental policy, domestic law, international regulations, government policies, funding and grants, local market, pressure groups, conflicts, human rights, etc.

Economic analysis: With this aspect of analysis, the local economy, market trends, global economics, competitors, taxes and tariffs, seasonal market trends, unique industry practices, distribution trends, currency interest and financial exchange rates are all evaluated.

Social analysis: Through this analysis, you’ll understand the lifestyle, demographics, consumer taste, brand perception, fashion trends, retail outlets, and cultural norms in the assessed markets.

Technological analysis: Complete this analysis to understand the impact of competing technology, research and development funding, supporting technology, maturity of technology innovation, production capacity, communications platforms, legal frameworks and intellectual property protection.

Bringing everything together to make your best final decision

The cereal company evaluated all available evidence pertaining to:

1. The values of the owner and operator,
2. The business capacity of the prospects
3. The risk involved from the PEST Analysis.

In the end, they negotiated and concluded an agreement with the supermarket chain based on an analysis and assessment of risk and opportunities arising from establishing this business relationship. While the 90 day period was outside of their usual contract, the risks in the distributor’s market and their inability to secure a bank guarantee meant the supermarket chain provided a safer, more stable partnership with opportunities for growth.

With these steps in mind, you’ll be ready to step into your next negotiation in Asian markets and come out with the deal that will best serve your business needs and goals.

The post Grow your presence in Asian markets by negotiating better deals with your partners appeared first on Trade Ready.

Trish Tully, CITP|FIBP, BComm, MBA, is the Vice President of Marketing and Sales at Survival Systems Limited, the world’s leading provider of training simulator solutions for emergency and survival situations.

Their extensive safety and survival training solutions include high tech simulators designed for specific situations in the offshore, marine, aviation and industrial sectors.

When the right person and the right company join forces

Trish has been a loyal and integral member of the Survival Systems Limited staff from the very beginning of her career, joining the company a little over two decades ago.

“After working in various positions in different industries, I was in the process of completing my BComm at Saint Mary’s University in Halifax, Nova Scotia in 1994 when I started with Survival Systems Limited as the Founder’s Executive Assistant.”

Trish didn’t know it at the time, but this was to be the start of her exemplary career, not only with SSL, but in the international trade industry as well. As she demonstrated her skills and dedication within the company, she worked her way up to higher and higher positions, landing the VP of Marketing and Sales role in only four short years.

I was completing my Executive MBA at Saint Mary’s University from 1997-1999, when a need in the company opened up and I was able to step in as VP – Marketing and Sales.

Evolving with her exciting and demanding role

She stays motivated in her often-hectic role by enjoying the variety of tasks and the challenge of day to day operations, interacting with people from dozens of countries around the world.

“While Survival Systems Limited’s sales are typically 95% exports on a per annum basis, this is what makes no day in my position typical. SSL is a small (25+ employee) private enterprise with clients for our safety training simulators in approximately 50 countries.”

“My role entails new business development, marketing, contract negotiations, sales, customer service, and more.”

On any given day, I am dealing with many different clients (repeat, new, potential) in a number of countries.

“Some matters can be dealt with rapidly, while others require input from various departments in the organization, including logistics, engineering, operations, and accounting. Development of potential new clients is strategically demanding, often requiring deployment (either by me or the owner, Paul Douglas) or attracting the client to visit our facilities in Dartmouth, NS.”

Sharpening her skills by excelling in targeted training

Trish is able to stay on top of all of this activity and help her company thrive, and throughout the years she continues to update her knowledge and skill set through targeted training. It was this kind of ambition that motivated Trish to enrol in FITTskills courses in 2005.

“I had read about the organization in the mid-1990s. Finally, a decade later, from 2005 to 2007, I undertook the FITTskills program at the World Trade Center in Halifax, Nova Scotia.”

“The courses were great as there were participants with diverse backgrounds, including those new to the export field, as well as seasoned veterans in the class. We had outstanding international trade professionals teaching the classes, including Leroy Lowe, CITP®|FIBP® and Pernille Fischer Boulter, CITP®|FIBP®.”

Trish says that though she had developed valuable global trade skills through her career in an international company, her FITTskills training helped strengthen and sharpen those skills, poising her for future success.

The FITTskills program helped me to confirm and enhance my practices in an export and marketing career, which had initially developed through my work with SSL.

“I was proud to be the first FITT student to receive 100% on a project course for my International Marketing submission as it validated my existing capabilities combined with newly acquired FITTskills.”

Always prepared to meet challenges, sometimes at a moment’s notice

Trish has used her sharpened skills in many exciting international projects throughout her career with Survival Systems Limited.

“All the projects I work on are interesting because none are the same. One of the most interesting projects was with the Arab Academy for Science, Technology & Maritime Transport (AAST&MT) in Alexandria, Egypt.”

“At that time, in 2006, the founder Albert Bohemier contacted me from Croatia and asked me to meet him in Cairo because the tender for a Helicopter Underwater Escape Trainer (HUET) for AAST&MT was closing in days and there were many competitor bids.”

“At the time, I was dealing with personnel visiting from the Chilean Navy, working on a contract with the Spanish Navy, and about to leave for Ottawa for meetings. All these activities were handled within the organization and off to Cairo I flew.”

“After spending the first day with the client, feeling defeated because of the various competition and one vendor in particular that looked like the favourite to win the contract, we sat outside the hotel on Corniche Road, having a Stella Artois.

“We continued to discuss what could we do to win the project and I raised the point about the required personnel-rating of the HUET lift system.”

In that instant, we felt we could use that unique selling feature to influence the client to prefer SSL’s equipment.

“The rest is history and SSL and AAST&MT have been enjoying a long-term successful relationship ever since.”

Cementing her leadership status

In 2008, Trish decided to reinforce her commitment to global trade and establish herself as a leader in the field by applying for her CITP®|FIBP® designation.

“I wished to hold the CITP®|FIBP® designation because I am a seasoned global trade professional and acquiring the CITP®|FIBP® designation provides accreditation to my value proposition.”

She feels particularly proud to be a recognized member of the elite global trade community of CITP|FIBP’s.

It makes me feel confident and pleased to be a member of an elite community of certified global trade experts who have earned the designation by demonstrating practical hands-on experience and applied knowledge.

In the future, Trish knows her designation will easily identify her as a knowledgeable expert and leader in her field.

“The designation also adds credibility and pre-qualifies me as a capable international trade professional.”

Trish will continue to lead her company and colleagues with her hard work, dedication, and resourcefulness as she applies those virtues every day on the job.

“An anecdote that inspires me and has had a lasting impression fits appropriately with SSL’s business and comes from a retired Command Diving Officer (Ray Smith) who I used to have dealings with in the United States Navy:

‘If you are not making waves, you are not underway’.

“It’s so true. One must be in motion to expect results.”

The post Trish Tully, CITP|FIBP – VP Marketing and Sales, Survival Systems Limited appeared first on Trade Ready.

All parties in all commercial transactions should be aware of the potential for fraud. In some cases those parties you negotiate with may not even be aware of the liability they pose.

Fraud—intentionally deceiving another party—is a criminal offense under common law and a civil violation under civil law. While companies claim transparency, or on the surface may seem safe, failing to fully investigate the party you are contracting with is an invitation for fraud.

Article 3.8 of the UNIDROIT Principles of International Contracts states,

“A party may avoid the contract when it has been led to conclude the contract by the other party’s fraudulent representation, including language or practices, or a party may avoid the contract when it has been led to conclude nondisclosure of circumstances which, according to reasonable commercial standards of fair dealing, the latter party should have disclosed.”

While most often considered a matter of criminal offence, during the 22 October 2007 UN General Assembly meeting, the Commission Secretariat noted their increasing attention to the area of commercial fraud, which is considered to be one of the present day’s greatest threats.

They stated that:

Commercial fraud often has an international character, and the activity poses an obstacle to international trade, which has a negative effect on the stability of national economies.

Even with a decade of highly publicized scandals such as Enron in the U.S. and Deutsche Morgan Grenfell in England, and the increased efforts to regulate and control it, fraud continues to be a major issue for countries all over the world. The increasing complexity of fraudulent conduct that entrepreneurs must guard against includes the following activities:

Non-Delivery, Thefts, Piracy, False Reporting, Falsifying Documents, Investment of Commodity Fraud, Deceptive Marketing or Advertising, Supression of Regulatory Breaches

Be vigilant in your due diligence in international contracts

Due diligence is the thorough investigation or audit of all matters relevant (e.g., financial records) to an agreement between potential contracting parties. Due diligence before and during negotiations is the best way to limit the financial loss, reputation diminishment, civil tort (law suit brought for a wrong other than a breach of contract) or litigation and in some instances bankruptcy that can result from fraud.

Unless an uncovered risk is so substantial as to be a deal breaker, negotiations are a way to work through the issues towards a successful contract.

As with other areas of negotiations, due diligence can be an increased challenge in international contracts because of language barriers, corporate business cultures, disparity of national rules, and distance.

Regardless, every effort must be made by both parties to research all aspects of your potential partner as thoroughly as possible.

Some examples of areas of research on your potential partner’s company include:

• Financial arrangements such as loans or indemnities
• Market potential, competitive position or future performance indicators
• Labour, human resources or union agreements (or lack thereof) and workforce capability
• Cultural or language barriers and associated management or integration costs
• Quality control, government regulations and environmental issues such as hazardous material disposal or clean up
• Information technology, including system integration, security and upgrades, as well as hardware and production or manufacturing equipment

It is also important to research the laws of the nations governing international contracts to understand how your company can best protect or proceed with litigation to recover or prosecute for damages as a result of fraud.

Remedies to Fraud in International Contracts

New scams are emerging every day, and in addition to due diligence, you can guard your company or investments from fraudulent international contracts in the following ways:

1. Acquire expertise
If this is not your area of expertise, obtain advice from consultants or lawyers who specialize in both international trade contracts and the market you are trading in. Invest in accounting and marketing expertise when investigating bottom lines and market potential.

2. Employ letters of credit and secure payments methods
While guidelines on payment terms and methods are relative to the business relationship (for example, established trust between two businesses may result in a longer payment term), each party should still take every precaution to create secure and clearly stated terms.

Letters of credit have banks guarantee sellers payment or partial payment on behalf of buyers according to rigidly defined terms.

While they do not eliminate the risk of fraud, and are often used by fraudsters to provide a false sense of security to inexperienced traders, letters of credit, used with appropriate supporting advice, can be helpful in mitigating the risk of fraud.

3. Place requirement clauses in contracts
Negotiating requirements into contracts, such as product samples or analysis, insurance, currency, certification, and compliance or regulatory documentation is an effective measure to ensure you are dealing with legitimate parties.

4. Be aware of current trends
There are a number of organizations and consumer advocacy groups such as National Anti-Fraud Network and the U.S. Federal Bureau of Investigation who post the latest fraud schemes and safeguard suggestions.

5. Limit technical and physical security access
Limit both physical and virtual access of contracting parties to sensitive areas.

Due diligence is the best way to uncover any potential risks and avoid costly and time consuming litigation in an international incident.

Have you followed all of the above to ensure your international contracts are secure? Have you ever had any experiences with contract fraud, and if so what did you learn from the experience?

The post 5 ways due diligence can prevent fraud in your international contracts appeared first on Trade Ready.